Italy’s La 7 on the block

Net could become rival to Mediaset, RAI

Telecom Italia has confirmed that Italo merchant bank Mediobanca is exploring options for the sale of its TV network La 7, in a move that could create a strong competitor to prime minister Silvio Berlusconi’s Mediaset TV group and pubcaster RAI.

La 7, Italy’s third-largest terrestrial broadcaster, has long been awash in red ink. Viacom is expected to acquire its 51% stake in MTV Italia.

But despite debt, the channel, 77%-owned by Telecom Italia Media, has been investing since hiring former Mediaset star anchor Enrico Mentana last year.

Last week 7 inked a deal for several specials with anti-Mafia author Roberto Saviano, a hot TV commodity on pubcaster RAI — causing Telecom Italia Media stocks to soar. La 7 is also in talks to hire talkshow host Michele Santoro after he left RAI, reportedly due to pressure from Berlusconi, who long accused Santoro of being a political enemy.

The indie station averages a 3.5% audience share, a fraction of the 40% shares that RAI and Mediaset each command in what is essentially a duopoly. But analysts believe La 7 could rapidly double its ratings, driven by strong news-related programming, which Italians are hungry for.

Some pundits predict the TV market is due for a shakeup, as Berlusconi progressively loses his 17-year domination of the political and media landscape.

As for buyers, there have been rumors that media group L’Espresso is circling La 7, denied by Telecom Italia and L’Espresso topper Carlo De Benedetti. Analysts also see La 7 as a good fit for Rupert Murdoch’s satcaster paybox Sky Italia, which wants to expand into terrestrial.